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China loses immunization to semiconductor downturn

26 January 2009 | By Mark Osborne | News > Fab Management

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The semiconductor market in China is expected to decline by 5.8% in 2009, according to iSuppli CorpThe semiconductor market in China is expected to decline by 5.8% in 2009, according to iSuppli Corp, as the global economic downturn impacts demand for China produced products. The decline in China’s semiconductor industry growth is seen as a significant event by the market research firm as this is the first such decline the country has experienced.

"Such a downturn is remarkable for an region long regarded as a vigorous and reliable growth driver for global semiconductor market," stated Kevin Wang, senior manager of China research at iSuppli. "Even during the disastrous year of 2001, when global semiconductor revenue plunged by 28.6 percent, China’s industry managed to surge by 24.4%. With global semiconductor revenue expected to decline by 9.4% in 2009, and with consumer confidence at risk of falling further, China’s semiconductor outlook could dim even more than iSuppli presently forecasts."

China's semiconductor market is expected to reach US$72 billion in 2009, down from US$76.5 billion in 2008. However, iSuppli believes that new stimulus packages by the Chinese Government, which amounts to US$570 billion over the next two years, will directly help the semiconductor market to recover in the country.

Growth is projected to return in 2010, which is expected to increase 9% over 2008 and grow a further 11% in 2011.

The development of further technical standards is also expected to assist domestic technology companies and to protect them from overseas competitors.

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